Tide turning in transtasman hard sell

By GREG ANSLEY

At the end of her Australian tour Prime Minister Helen Clark sat down for lunch at the top of Chifley Tower in the heart of Sydney's central business district, at the head of a table stacked with Australia's movers and shakers.

The guest list included billionaire Seven Network chairman Kerry Stokes, Fairfax chief executive Fred Hilmer, and the heads of Macquarie Bank, Alcatel, Citibank, Hutchison Telecom, Microsoft Australia, PBL and Salomon, Smith, Barney.

The mood, said Clark and others, was upbeat.

"The [Australian] business community reaction has been very, very heartening," she told the Business Herald.

"I've just come from lunch with very senior executives and consistent with what we've been hearing everywhere else, people are recording very positive experiences with their businesses in New Zealand."

The reaction of a usually sceptical, frequently hostile, Australian media to her week-long economic mission confirmed that the winds may be starting to shift a little in New Zealand's favour.

Australia's two most influential talkback hosts, attack dogs John Laws and Alan Jones, were won over to the cause. Jones was so impressed he replayed his interview with Clark the day after the live broadcast.

A decade or so after Australian dries abandoned New Zealand as their guiding light and most big newspapers withdrew their correspondents from Wellington, is the country making it back to the transtasman big time?

The answer is a cautious: Perhaps.

New Zealand is far from flavour of the month, but packed meetings, lunches, working breakfasts and brainstorming sessions in Sydney, Melbourne and Brisbane uncovered a readiness to concede that there was more to the country than sheep, Ansett and rugby's World Cup.

This is by no means universal, especially among a financial community burned and angry on one side by the collapse of Ansett and on the other dismissive of, or simply uninterested in, an economy it believes is hardly worth the effort.

"The three companies I've dealt with in New Zealand in the past couple of years have come to Australia looking for money," said Melbourne technology analyst and assessor David Randerson, of Acuity Technology Management.

"It really has been for them a hard sell, going around to the brokers, the investment houses, saying, 'I'm from New Zealand, I've got some good technology'. I don't think the investing community has an appreciation that there is science and technology done to a significant level in New Zealand."

Another investment analyst said distance and ignorance remained huge barriers.

"The profile of New Zealand for most Australian business people is very, very low," he said. "It's just apathy, just the way people are. If they're not forced to think about something, they don't."

But two key points came from both Australian and New Zealand innovators who have carved out a transtasman beachhead. The first is that Australians are recognising they are also minnows in a vast global pool and need all the help they can get. The second is that if New Zealanders can get a hearing for their ideas, it does not matter where they are from.

Even the collapse of Ansett may not have been as damaging as feared where it counts most.

"In the top corporate ranks it's all about the credibility of what you deliver as an organisation," said Theresa Gattung, chief executive of Telecom Group, whose Australian subsidiary AAPT is Australia's third-largest telecommunications firm.

"I accept that in the populist world, all the histrionics around Ansett has damaged what's been a lasting and deep [transtasman] relationship. But it didn't really have that impact in the business community."

Australia's federal and state Governments are putting Ansett and other distractions behind them, with a new push to remove the remaining bristles from CER - notably in taxation and business regulation - and to encourage new corporate liaisons in biotechnology, information and other emerging technologies.

Prime Minister John Howard fulfilled an earlier promise to do all he could to help Clark's mission by meeting her for the sixth time in four months, and pressing the flesh with delegation members at a Darling Harbour reception.



In Brisbane, Queensland Premier Peter Beattie, who led a business mission to New Zealand this year and intends returning, enthused over the potential of strong transtasman ties in a competitive world.

"There are mutual benefits for Australia and New Zealand, and we'd be mad not to have closer co-operation."

Translating that into deals, investment and sales can be another matter.

Acuity's Randerson said much of the problem was with analysts whose lack of knowledge about New Zealand was compounded by inadequate understanding of research and new technologies.

"When New Zealand's Genesis group listed in Australia two years ago, for example, its broad portfolio scared off analysts who believed such companies should focus only on single research areas.

"Along comes a Genesis, which has research going on in forestry, in human pharmaceuticals, human diagnostics and animal areas," Randerson said. "The analysts look at that and say, 'It's too hard. It's too much of a mixture, it's a vegetable soup and we don't understand it'."

Other analysts said New Zealand innovators were further handicapped because many of the potential partners and investors were international groups whose local managers might not be Australians or whose key decisions were made overseas.

"I think," said one analyst, "the opportunities are mainly to get large corporations more familiar with what New Zealand has to offer, so they can take equity positions in small New Zealand companies that want an equity injection and which want to take advantage of those companies global marketing connections".

Invest NZ took Australia-based executives responsible for the local venture programme of one international firm to New Zealand to demonstrate the capabilities of universities and small companies.

One Australian businessman, who floated his company in the United States and formed his own private venture fund, told a Sydney breakfast meeting he had bought a promising but struggling New Zealand company and wanted more.

Auckland-based Orion Systems International will on June 17 commission its groundbreaking computerised patient record system at Melbourne's big, 900-bed, Peninsula Health hospital and is setting up an Australian distribution system.

On both sides of the ditch there is a recognition that collaboration, especially in biotechnology and information and communication technology, makes sense.

Trade New Zealand's Sydney manager, John Nicholson, said one Melbourne company was completing British and Irish standards approval for several products, all of which were New Zealand-made.

Dr William Rolleston, director of South Pacific Sera and former chairman of biotechnology and pharmaceutical industry group Biotenz, said that with the market dominated by global players, transtasman biotech companies had to work together.

His company, which produces donor animal blood products for pharmaceutical, diagnostic and biotech industries, works with transtasman rivals, supplying them with its product and producing items under their labels.

"In a sense we're adding capability and product range to them. They're adding capability to us, and we all win," Dr Rolleston said.

For the fashion industry, riding on the peak of a $200 million transtasman apparel trade, New Zealand and Australia have become a single base for global expansion.

"To me, Australia and New Zealand are such close companions culturally and creatively that I've always thought of us as actually being one market," said internationally feted Auckland designer Karen Walker.



Business delegation head Gattung said: "What I think is happening at the moment is that certain sectors, fashion and wine, are powering ahead in Australia and being seen as really exciting, really different and leading edge.

"If there are more and more of these stories the adjectives we're trying to sell New Zealand under - creative, innovative, at the edge - will start to become the way ordinary Australians think about New Zealand."

But there would be no quick fix, she said.

"This is not a one-week job. This is a lifetime mission."